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Warehouse Club Prices Sharply Lower Than Rivals

New data show wholesale stores offer savings of up to 80 percent compared to competition.

November 6, 2005, 07:00 pm

WASHINGTON -- Consumer anxieties over rising inflation and historically high fuel costs are boosting sales in the $90 billion-a-year warehouse club sector. Dominated by the Big Three -- BJ’s Wholesale, SAM’S CLUB and Costco Wholesale --members-only warehouse clubs are known for offering deep discounts on groceries and household items.

This reputation for low prices was confirmed by new empirical research that shows warehouse clubs offer savings of up to 80 percent, compared to grocery stores and supercenters, reported Larston Business Reports.

Warehouse Club Focus , a bi-monthly newsletter that covers the warehouse club channel, unearthed the results in its annual survey comparing warehouse club prices to those at grocery stores and supercenters. The survey used 33 food items and 27 non-food items in 12 separate categories. The data was gathered in California, Georgia, Florida, Arkansas, and Massachusetts, according to the report.

"Our survey results clearly show that the clubs save a considerable amount of money in comparison to grocery stores and supercenters," Michael Clayman, editor of Warehouse Club Focus , said in the Larston Business Report. "That savings is dramatic when considering not only the percentage difference, but the dollar difference."

When asked what makes this particular survey noteworthy compared to past surveys, Clayman said in the report, "If you just look at SAM’S CLUB compared to regular grocery stores, SAM’S is 80 percent lower on food prices and 72 percent lower on non-food. If you took a four-month period of time, the average consumer could save $399.73."

Clayman told Larston Business Reports that the widespread popularity of warehouse clubs is likely to continue in the foreseeable future, as consumers respond to a dubious economy by flocking to discount stores. "With the cost of gasoline and heating oil this winter, consumers will be looking under every rock to save money," Clayman said in the report.

Warehouse club consumer membership fees range from $35 to $45 a year. "While paying a membership fee has to some been a stumbling block, the savings certainly outweigh the cost of a club membership," Clayman told Larston Business Reports.